We propose a hypothesis that the Stat3 signaling plays essential roles in differentiation of precursor cells in mouse retina. The hypothesis suggests a molecular mechanism of STAT activation in response to cytokines or growth factors and transfer of the signal to the nucleus controlling cell determination and differentiation. This hypothesis is based on our recent findings, which demonstrated involvement of STAT proteins in cell growth control and in determining the dual functions of the cytokines (Cell, 70, 323; Cell, 74, 1135; Science, 272, 719; Nature, 386, 288; MCB, 17, 5328; Science, 283, 222; JBC, 275, 867). In particular, we have evidence showing that Stat3 can directly or indirectly regulate gene expression of key transcription factors for cell differentiation in retina, such as Hes1 or Otx2. We have shown that activation of Stat3 but not MAPK is necessary for CNTF-induced suppression of rod photoreceptor determination (Neuron, submitted). Recently we have successfully generated retina-specific Stat3 knock-out mice. More detailed examination and analysis of these mice are necessary and crucial for further understanding of molecular mechanisms of STAT-regulated cell differentiation in vivo. We will focus on molecular mechanisms of STAT-mediated cellular responses, characterize potential physiological and pathological roles of Stat3 protein, and furthermore clone new genes that are controlled by the Stat3 signal. Using a retinal explant system, STAT recombinant adenovirus, retina tissue-specific Stat3 knock-out animal, and mouse retina-specific DNA microarray, we will focus on the following specific aims 1) To reveal the molecular basis of Stat3 functions in response to growth factors or cytokines in mouse retina. 2) To investigate the molecular mechanisms of Stat3 in control of differentiation in distinct neuronal retina cells. 3) To study the Stat3 function in modulation of gene expression and to find novel genes that are controlled by Stat3 in retina. We believe that these experiments will explore a novel and exciting field of STAT functions in cell differentiation and pathogenesis of retina degeneration diseases. These studies will contribute to our understanding of the molecular mechanisms of gene regulation in response to cytokines and other extracellular factors in retina. The reagents generated or to be generated in this application will contribute to the whole community of retina research.